The Federal Communications Commission eases requirements on phone companies offering DSL, letting them compete better with cable while squeezing indepedent ISPs.
The Federal Communications Commission today eliminated facilities-sharing requirements on telephone companies providing broadband Internet service, meaning that by August 2006, telephone companies providing broadband via DSL or other technologies will no longer have to offer competitors discounted access to their telephone networks.
The FCC’s new Republican Chairman Kevin Martin put off the FCC’s meeting by a day to extend discussions with the other three sitting FCC commissioners; the commission has five seats, but one is currently vacant, leaving the commission equally split between Republicans and Democrats. The commission’s 4-0 vote on this issue is widely seen as a victory for Chairman Martin.
The decision is intended to let telcos compete more evenly with cable broadband providers, who currently lead the market for broadband Internet service in the United States. Internet access through cable companies have been classified as an "information service,", while broadband access through telephone companies was still subject to common-carrier regulation, including that telephone companies open their networks at a discount to broadband competitors. Telephone operators complained the requirement made it unduly difficult to compete with cable companies and, potentially, forthcoming IP-over-powerline services, thus significantly delaying the deployment of telephone-based broadband Internet access within the United States.
However, the deregulation of so-called "wireline" broadband services may have a chilling effect on competition within the DSL market, where Internet providers who are not themselves telephone operators—such as Earthlink and SpeakEasy—may effectively be shut out of DSL services via existing telco networks. Thus competition between ISPS within the DSL market segment may decline—and DSL prices rise—as a result of the FCC’s decision, providing less choice to consumers in the many markets not adequately served by multiple broadband technologies.
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